America is supposed to be the land of the free. Yet, with only 5% of the world population, we house at least 25% of the world's prisoners. A report from CEPR shows that up until about 1980, you know, the start of the Reagan Revolution, incarceration rates were relatively stable. Since then, we've gone from 220 people per 100,000 to 758 per 100,000. That's an increase of 240%, with African Americans bearing the brunt of the increase.
Proponents of prison labor say that inmates can earn $400 a month. That's a lot of money for someone who has no other expenses. Do they actually get to keep that money? I doubt it. They're being charged up the yazhoo for phone service, internet service, and anything else extra. Will they have any money left when they leave prison?
Even if they left prison with substantial savings, they have a felony on their record, and most likely they're still on probation. So very few employers will hire them despite having paid their debt to society (as if prison just wasn't enough vindictive punishment) and despite having new skills from their "work experience". That might explain the astounding 52% recidivism rate we experience from our current prison system. Parolees who can't get jobs may have no choice but to turn to crime as a way to get money and maybe back into prison so that at least they have a place to stay.
It's a two for one deal for employers. Not only do employers get skilled or semi-skilled labor for peanuts, the employer can use that prison labor to depress market rates for the same work. Then when the prisoner gets out, he can't get a job with a felony so he's not really able to compete in the "free market" and must accept subpar wages or go back to crime.
This is one enormous subsidy to businesses who use prison labor. The cost to businesses that partake doesn't even come close to the labor costs outside of prison. From a moral and financial perspective, prison labor is so close to indentured servitude as to blur the line. This is all supposed to be more efficient, but the claim that private prisons are more efficient than public prisons is not supported by the recidivism rate. Private prisons really have no economic incentive to limit recidivism. Their goal is to keep those cells full.
If businesses are really doing such a great favor to society, prison labor should be a non-profit venture between business, the employee and the state. It should not be a profit center enticing the state and businesses to put people in jail. Given the way that prosecutors are so keen to withhold exculpatory evidence, and how judges can be more than a bit capricious for money on the side (like in the Kids For Cash Judge cases), it would not surprise me to see a coordinated campaign emerge between the state and businesses to make America, the land of the free, a prison state. For profit.